WCA International Visionaries Roundtable: State Of Broadband Wireless Access—continued

Regulatory Role-Play

Thomas Sugrue, Federal Communications Commission Wireless Telecom Bureau chief, said the U.S. economy is not in a recession and that the Commission has limited authority to do more than allocate spectrum and watchguard telecom competition.

"I was in the Department of Commerce for a couple of years," Sugrue said. "Certainly we're experiencing a significant slow down, but we haven't showed negative growth two consecutive quarters. I think we need to sharpen our focus to see if there are regulatory impediments to wireless broadband developments, but we're not responsible for everything."

"We can adjust around the edges and talk about spectrum, because we don't know when to auction additional spectrum in the 24 GHz band with the economy where it is. This is not just a monetary consideration. Right now might not be the right time for the most efficient rollout of the band," Sugrue said. "We also look at being a little more sensitive to what we can do to balance license and unlicensed rules to make both bands usable and competitive."

"I'm very bullish on the wireless industry," Sugrue said. "Once people get used to broadband connectivity, demand will ratchet up capital markets. Unlike wireline broadband access that uses ILEC facilities, wireless has a less complex time connecting customers—think about unbundled network elements and line sharing alone. With wireless, there are none of the dig costs associated with fiber."

"Certainly, wireless has it own set of issues like tower access, but the advantages of wireless broadband is clear." Sugrue continued. "Our spectrum policy is what this business runs on and we stand ready to use the tools that Congress has giving us to address obstacles to competition via enforcement of the rules on the books."

Blame Canada
Dr. Michael Binder, Assistant Deputy Minister for the Spectrum Information Technologies and Telecom Industry of Canada, briefly extolled the progress of the Canadian broadband story, which started four years ago.

"The New National Dream: Networking the Nation for Broadband Access is working. Canada isn't only about moose, mountains, and Mounties. Fixed wireless broadband is one of the most effective ways to connect a wide-open country with lots of space and sparse, remote populations. But you don't think about us as a high-tech country. Canada is not just a nice place to visit; it's a great place to do business," Binder said.

"In 1997 the Canadian government decided to strive to be the most connected nation on earth and we've been working since then to try and achieve this objective. In 1999 all schools and libraries were connected successfully connected to the Internet. We have greater broadband access available for Canadians at lower rates than the U.S. Broadband use is about 13 percent. But we do have some challenges—wireless access could do better here," Binder explained.

"We would like to connect all our communities with broadband access by 2004. The program is simple to articulate. We have roughly 6,000 rural communities—some of the most remote communities on earth are not in Africa—they lie in Canada. So here's the problem; 20 percent of Canada's 1,200 communities have access to some broadband services. But 80 percent do not, which translates to 25 to 30 percent of the population that has no access at all, and a very low access probability."

"The Internet is a crucial new medium—we cannot ignore 80 percent of our communities and 30 percent of our population. So we decided to connect Canadians, but we didn't know how to do it," Binder continued. "We invited the best and brightest of the wireless industry to Canada, to learn how one might connect all our communities with broadband access. Basically, what the task force found is that all Canadians should have access to the benefits of broadband. Even it's not cost effective for businesses to provide high-speed access for all. We also all agreed that the cost for broadband access should be the same in downtown Toronto as in more remote communities," Binder added.

"I've never seen such a collective agreement between consumers, government and industry. As a united force, we set forth guiding principles to foster competition, provide a good regulatory environment, and allow a broadband business model to develop. We're not afraid to intervene and subsidize to make broadband happen in Canada, but how much and how far remains a question. We are very optimistic we can do this with minimum subsidies. But we're willing to subsidize broadband deployment, if and when the time comes."

Wireless windup
Perspective is a point of view based on what the senses can interpret from one's immediate surroundings. Whether the current monetary environment encapsulating the state of the wireless broadband industry is perceived as slowed, stalled, or stopped dead in the air depends on where you stand right now.

Fixed wireless broadband is a growth industry—it has not slowed down, sufficient demand is out there, and I think things will turn around soon. The "recessionary" problem remains overblown by the financial community. In the past, the capital marketplace applied little discretion as to what Internet technologies to finance and which not to finance.

The vast majority of capital raised during the stock market boom did not connect customers—it did not finance network build outs. A combination of broadband technologies remains the healthiest financial diet for high-speed service providers—copper, cable, fiber, and fixed wireless.

Much of the dot-com gold rush went toward the wrong need—it filled the pockets of companies without a profit plan—those firms that were not focused on broadband transport as a core function. The same firms that have their pockets turned-out empty now, begging on Wall Street, failed to present a reasonable profit plan. An unreasonable get-rich-quick financing frenzy gripped the market.

The financial market does grasp the level of technological sophistication required to deploy fixed wireless broadband access, so it continues to be skeptical of the service segment. My suspicion is this—the money will flow once again to the companies that prove they have ways to make money—and fixed wireless broadband access is one of the paths to profit.

But this broadband profit plan must be built to serve businesses. Only then will broadband profits carry wireless high-speed services to the consuming public—where copper and coaxial cable connections are not an option.

—End

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Related articles:
	[June 12, 2001]	Boston's Wireless Internet Party
	[June 26, 2001]	WCA International—Broadband Now!
	[Apr. 26, 2001]	Fixed Wireless Remains Viable Broadband Option